Effect of property tax administration on local government revenue: A case of Rwanda revenue authority in Nyarugenge district, Kigali

Vedaste Mungwarakarama; Victoire Muhayimana

doi:10.51867/ajernet.6.3.83

Authors

Vedaste Mungwarakarama Institut d’Enseignement Superieur de Ruhengeri (INES), Rwanda
Dr. Victoire Muhayimana Institut d’Enseignement Superieur de Ruhengeri (INES), Rwanda https://orcid.org/0000-0002-1424-7288

DOI:

https://doi.org/10.51867/ajernet.6.3.83

Keywords:

Character Property Tax, Local Government Revenue, Property Tax Administration, Property Tax Registration, Property Tax Payment, Property Tax Enforcement

Abstract

Property taxes are a common source of revenue for local governments around the world, playing a crucial role in funding essential services and infrastructure. However, the management and implementation of these taxes often face significant challenges, raising questions about their effectiveness. The general objective of this study was to examine the effect of property tax administration on local government revenue in the RRA. The specific objectives of the study were as follows: to examine the effect of the character of property tax on local government revenue at the RRA in Nyarugenge District; to examine the effect of property tax registration on local government revenue at the RRA in Nyarugenge District; to examine the effect of property tax payment on local government revenue at the RRA in Nyarugenge District; and to examine the effect of property tax enforcement on local government revenue at the RRA in Nyarugenge District. The study was guided by Property Theory and Tax Theory and employed a descriptive research design. The study population consisted of 103,985 households and plots of land, and the sample size was 398 individuals. Simple random sampling was used to select respondents. Data were collected through questionnaires and analyzed using descriptive and inferential statistics. findings showed that the character of property tax (M = 3.70, SD = 1.268), property tax registration (M = 3.49, SD = 1.338), property tax payments (M = 3.73, SD = 1.330), and property tax enforcement (M = 3.66, SD = 1.249) each had an effect on local government revenue at the RRA. Moreover, the results indicated a positive relationship and significant effect of the character of property tax (B = 0.145, p = 0.000 < 0.05), property tax registration (B = 0.166, p = 0.000 < 0.05), property tax payments (B = 0.410, p = 0.000 < 0.05), and property tax enforcement (B = 0.228, p = 0.000 < 0.05) on local government revenue at the RRA. In summary, the study concludes that there is a strong and significant relationship between the character of property tax, property tax registration, property tax payments, and property tax enforcement and local government revenue at the RRA in Nyarugenge District. The study suggests that the RRA should optimize property tax registration, compliance, administration, collection processes, enforcement strategies, and fiscal capacity to boost revenue generation. This will lead to increased financial resources for local authorities, improved public services, and enhanced infrastructure development.

Downloads

Download data is not yet available.

References

Adaletey, J. E., Alkadash, T. M., Achiyaale, R. A., & Oware, K. M. (2022). Property Tax and Tax System for Revenue Mobilization. Special Education, 1(43), 4-29.

Adnan, M. Z., Suratman, R., & Samsudin, S. (2021). Enforcement on land tax arrears in Malaysia: A framework based on national land code 1965. Studies of Applied Economics, 39(10), 1-15. https://doi.org/10.25115/eea.v39i10.5359 DOI: https://doi.org/10.25115/eea.v39i10.5359

Ali, D. A., Deininger, K., Mahofa, G., & Nyakulama, R. (2021). Sustaining land registration benefits by addressing the challenges of reversion to informality in Rwanda. Land Use Policy, 110(1), 1-17.

https://doi.org/10.1016/j.landusepol.2019.104317 DOI: https://doi.org/10.1016/j.landusepol.2019.104317

Barvika, S., Rausis, A., & Berzina, I. (2013, May). Opportunities for the development of the Latvian property tax administration system through improvements in the property registration system and the implementation of European Union requirements for geospatial information. In Proceedings of 18th international conference on urban planning, regional development and information society 1(1), 671-682.

Bogacki, S., & Martyniuk, V. (2022). Selected tax problems of administrative enforcement of taxes and local fees. Teka Komisji Prawniczej, 15(1), 15-27.

https://doi.org/10.32084/tkp.4448 DOI: https://doi.org/10.32084/tkp.4448

Chang, C. J., Silu, Z., & Mo, W. S. (2011, August). On household register problems in property tax reform. In 2011 2nd International Conference on Artificial Intelligence, Management Science and Electronic Commerce (AIMSEC) 1(1), 447-450.

https://doi.org/10.1109/AIMSEC.2011.6010213 DOI: https://doi.org/10.1109/AIMSEC.2011.6010213

Cheng, Y., Jia, S., & Meng, H. (2022). Fiscal policy choices of local governments in China: Land finance or local government debt? International Review of Economics & Finance, 80(1), 294-308.

https://doi.org/10.1016/j.iref.2022.02.070 DOI: https://doi.org/10.1016/j.iref.2022.02.070

Deepak, B. D., & Ali, A. M. (2024). Tax as a Primary Source of Revenue for Local Bodies: A Critical Analysis. Int'l JL Mgmt. & Human,7(5), 791-802.

Edison, A. E., & Claude, R. (2020). The Effect of Property Tax to Public Expenditures in Rwanda. International Journal of Advanced Scientific Research and Management, 5(9), 52-57. https://doi.org/10.36282/IJASRM/5.9.2020.1747 DOI: https://doi.org/10.36282/IJASRM/5.9.2020.1747

Feir, D. L., Jones, M. E., & Scoones, D. (2024). When do nations tax? The adoption of property tax codes by First Nations in Canada. Public Choice, 199(3), 285-318. https://doi.org/10.1007/s11127-022-01039-4 DOI: https://doi.org/10.1007/s11127-022-01039-4

Fjeldstad, O. H., Ali, M., & Goodfellow, T. (2017). Taxing the urban boom: Property taxation in Africa. CMI Insight, 1(1),1-8

Frecknall-Hughes, J., & Kirchler, E. (2015). Towards a general theory of tax practice. Social & Legal Studies, 24(2), 289-312.

https://doi.org/10.1177/0964663915571787 DOI: https://doi.org/10.1177/0964663915571787

Goodfellow, T. (2017). Taxing property in a neo-developmental state: The politics of urban land value capture in Rwanda and Ethiopia. African Affairs, 116(465), 549-572. https://doi.org/10.1093/afraf/adx020 DOI: https://doi.org/10.1093/afraf/adx020

Hlengwa, S. (2020). Macro-economic determinants of property-tax revenue in South Africa (Master's dissertation, University of Cape Town).

Jiang, Y., & Jiang, X. (2025). The Impacts of Tax Enforcement on Enterprises' Digitization. Emerging Markets Finance and Trade, 61(11), 4049-4070. https://doi.org/10.1080/1540496X.2025.2503933 DOI: https://doi.org/10.1080/1540496X.2025.2503933

Jibao, S. S. (2022). Property taxation in Anglophone West Africa: regional overview. Lincoln Institute of Land Policy, 1(1), 1-87.

Jokivuori, J. (2023). Assessing the Potential Revenue and Distributional Effects of Property Taxation in Kenya: An Analysis of Property and Income Distribution among Kenyan Households (Master dissertation, University of Helsinki).

Koeva, M., Humayun, M. I., Timm, C., Stöcker, C., Crommelinck, S., Chipofya, M., ... & Zevenbergen, J. (2021). Geospatial tool and geocloud platform innovations: A fit-for-purpose land administration assessment. Land, 10(6), 557-580. https://doi.org/10.3390/land10060557 DOI: https://doi.org/10.3390/land10060557

Krier, J. E. (2009). Evolutionary theory and the origin of property rights. Cornell L. Rev., 95, 139.

Langley, A. H. (2022). Improving the Property Tax by Expanding Options for Monthly Payments. Lincoln Institute of Land Policy, 1(1)1-41

Maličká, L., Lukáčová, J., & Hadačová, D. (2022). Demographic and Economic Characteristics of Population as Determinants of the Revenue from the Real property tax in the Slovak Republic. Financial Law Review, 28(4), 1-13. https://doi.org/10.4467/22996834FLR.22.021.17139 DOI: https://doi.org/10.4467/22996834FLR.22.021.17139

Mamani, J. C. Q., Giersch, L. V., Guizada, C. E. R., Quispe, D. E. B., Flores, A. M., Quispe, T. L. B., & Vargas, E. C. (2021). Determinants of non-compliance with property tax payment in the district of San Miguel, province of San Román - Peru, 2020. Journal of Legal, Ethical and Regulatory Issues, 24(S1), 1-13.

Mueni, M. R. (2020). Analysis Of Tax Revenue Productivity for Selected Countries in the East African Community (Doctoral dissertation, Kenyatta University).

Nechaev, A., & Rasputina, A. (2020). Theory of tax variation calculation. In IOP Conference Series: Earth and Environmental Science (Vol. 421, No. 3, p. 032010). IOP Publishing. https://doi.org/10.1088/1755-1315/421/3/032010 DOI: https://doi.org/10.1088/1755-1315/421/3/032010

Netzer, D. (2016). Property taxes: their past, present, and future place in government finance. In Urban Finance Under Siege 1(1), 51-78.

Netzer, D., & Berne, R. (1995). Discrepancies between ideal characteristics of a property tax system and current practice in New York. Journal of Education Finance, 21(1), 38-56.

Ntahondereye, A., & Ntakirutimana, E. (2023). Assessment of Tax Enforcement in Selected Small and Medium Enterprises (SMEs) in Kigali City, Rwanda. East African Journal of Science and Technology, 13(1), 15-29. https://doi.org/10.62103/unilak.eajst.13.1.222 DOI: https://doi.org/10.62103/unilak.eajst.13.1.222

Ntayomba, J. M. V. (2019). Property tax policy in the City of Kigali (Rwanda): A Case study of policy implementation (Doctoral dissertation, California Baptist University).

Nurleni, A. F., & Salomo, R. V. (2023). Digital Transformation of Acquisition Fee Of Right On Land and Building Collection in Accelerating Property Registration Services at Jakarta Province. Jurnal Teknologi Informasi dan Pendidikan, 16(1), 218-233.

https://doi.org/10.24036/jtip.v16i1.787 DOI: https://doi.org/10.24036/jtip.v16i1.787

Nyabakora, W. I., & Ngomaitara, D. O. H. (2020). Assessment on Effective Implementation of Property Tax Systems in Tanzania (The Case of Dodoma Municipal Council). Assessment, 61(1), 1-8.

Nyabwengi, L. (2020). An evaluation of the property valuation process for County Government Property Taxation, Nairobi City. Africa Habitat Review, 14(1), 1731-1743.

Pedone, A. (2009). Tax theory and tax practice: the problems of defining, measuring and assessing tax bases. Longobardi E. e Petretto A.(a cura di), Saggi di Economia della Tassazione. Milano: Franco Angeli, 1(1), 17-38.

Samantela, S. S., & Maquiling, K. S. M. (2024). Examining institutional challenges of land value capture: The case of implementing land-based taxes in the Philippines. Journal of Human Ecology and Sustainability, 2(1), 7-21. https://doi.org/10.56237/jhes23021 DOI: https://doi.org/10.56237/jhes23021

Senawi, A., & Osmadi, A. (2024). Property tax reassessment among local authorities: the implementation and its key challenges. Journal of Financial Management of Property and Construction, 29(1), 152-167. https://doi.org/10.1108/JFMPC-04-2022-0022 DOI: https://doi.org/10.1108/JFMPC-04-2022-0022

Sherry, C. (2022). Review of Hanoch Dagan, A Liberal Theory of Property. International Journal of Law in Context, 18(2), 241-244.

https://doi.org/10.1017/S1744552321000707 DOI: https://doi.org/10.1017/S1744552321000707

Slack, E. (2023). Property Taxes in the Real World. Canadian Tax Journal/Revue fiscal canadienne, 70(1), 133-58.

https://doi.org/10.32721/ctj.2022.70.supp.slack DOI: https://doi.org/10.32721/ctj.2022.70.supp.slack

Waldhart, P., & Reschovsky, A. (2012). Property tax delinquency and the number of payment installments. Public Finance and Management, 12(4), 316-330. https://doi.org/10.1177/152397211201200401 DOI: https://doi.org/10.1177/152397211201200401

Wardhana, M., Susilowati, I. F., & Perwitasari, D. (2018, October). Registration of transfers of land of rights for nominee in the post of tax amnesty. In 1st International Conference on Social Sciences 226(10), 67-72. https://doi.org/10.2991/icss-18.2018.17 DOI: https://doi.org/10.2991/icss-18.2018.17

Yan, Y., & Reschovsky, A. (2023). Fiscal disparities among local governments in Zhejiang Province, China. Journal of Urban Affairs, 45(2), 236-257. https://doi.org/10.1080/07352166.2020.1851138 DOI: https://doi.org/10.1080/07352166.2020.1851138

Zhang, Y. (2021). The Demsetz's Evolutionary Theory of Property Rights as Applied to Rural Land of China: A Supplement. Land, 10(9), 888-903. https://doi.org/10.3390/land10090888 DOI: https://doi.org/10.3390/land10090888